Walk into almost any risk-adjustment discussion this year and you will hear some version of the same sentence: CMS now extrapolates RADV audit findings across your entire contract. Vendors say it. Consultants say it. I have said a version of it myself.
As of today, it is not accurate — and the organizations that understand exactly why are in a far better position than the ones operating on a headline they never checked.
1. What actually happened in court
A federal court vacated the rule that made extrapolation possible — and it did so without ruling on whether extrapolation itself is lawful.
In September 2025, the U.S. District Court for the Northern District of Texas vacated CMS’s 2023 RADV Final Rule in Humana Inc. v. Becerra. That rule was the instrument that both removed the Fee-for-Service Adjuster and expressly authorized extrapolating audit findings across a contract’s full population beginning with payment year 2018.
Critically, the court did not decide that extrapolation is illegal. It held that CMS failed to follow proper notice-and-comment procedure under the Administrative Procedure Act. The policy fell on process, not on substance — which is exactly why this is a pause rather than an ending.
2. Where it stands today
CMS filed its appeal to the Fifth Circuit in November 2025, and in its January 2026 HPMS memo stated it will comply with the court’s order while that order is in effect.
The practical position, then: RADV audits are proceeding at full speed, but CMS is currently pursuing recoveries on the sampled enrollees rather than extrapolating across the contract. If the appeal succeeds — or if CMS simply re-issues the policy through proper rulemaking — extrapolation returns. Treat this as a window, not a reprieve.
3. The audits themselves did not slow down at all
The legal setback changed what CMS can collect. It changed nothing about who gets audited.
This is the part organizations misread in the comforting direction. CMS’s accelerated RADV strategy remains fully in motion: an expansion from roughly 60 audited contracts per year to every eligible MA contract annually — on the order of 550 — with sample sizes scaled to contract size, a published quarterly cadence, and a five-month response window restored after industry feedback.
CMS has also scaled its review capacity dramatically, growing its certified medical coder workforce from about 40 to roughly 2,000, supported by technology-assisted review with final determinations made by human coders. The machine got bigger, not smaller.
4. Why the pause is the worst possible reason to relax
Consider what an organization is actually betting if it slows its documentation work now. It is betting that the Fifth Circuit will affirm, that CMS will not re-promulgate the rule correctly, and that the audit findings being generated today will never be re-priced under a restored methodology.
That is three bets in a row, on a policy CMS has pursued for over a decade. Meanwhile the audits happening right now are building the factual record — your error rates — that any future extrapolation would be applied to. The findings are being created during the pause.
5. How to talk about this credibly
There is a real professional advantage in precision here. When a vendor tells your board that extrapolation is live today, they are repeating a headline from 2023 that a court disturbed in 2025. When you can explain that the rule was vacated on procedural grounds, is under appeal, and could return through either the appeal or a corrected rulemaking — you sound like the person who actually reads the source documents.
That distinction matters beyond pedantry. It changes how you size your reserves, how you frame urgency internally, and how much credibility you carry the next time you tell leadership something is coming.
Final Thoughts
The honest summary is uncomfortable for both camps. The people saying extrapolation is live today are wrong. The people treating the vacatur as the end of RADV risk are more wrong.
As someone trained as a physician who later worked as a certified medical auditor, my read is that this is a window to get clean rather than a signal to coast. The audits continue, the findings accumulate, and the legal position could reverse on a court schedule nobody controls. Use the window.
If your board has been told extrapolation is live — or that the court ruling made RADV risk go away — both versions will cost you. At HealtheNomics I help risk-bearing organizations read the actual regulatory position and use this window to build documentation that holds up whichever way the appeal lands.
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